State agencies lead fight against Medicaid fraud

The Office of Inspector General relies heavily on state Medicaid Fraud Control Units (MFCUs) to rein in bogus claims, and an agency official says they could use more support.

In a recent podcast, Richard Stern, director of program oversight for the Medicaid Fraud Policy and Oversight Division, and Shimon Richmond, special agent in charge of the Miami region, discussed the challenges MFCUs face in a changing care delivery environment.

Medicare may get more headlines, Stern said, but Medicaid costs taxpayers more, with annual expenditures topping $500 billion. The OIG tracks and prosecutes fraud via a network of state-based MFCUs funded in large part by the federal government. While the OIG coordinates efforts with MFCU agents much of the time, Stern notes a number of cases successfully resolved by MFCUs that work independently. For example, MFCUs have increasingly prosecuted hospitals, assisted living facilities and nursing homes for neglect or abuse of elderly patients.

“These are difficult cases, and MFCUs are one of the few state or federal agencies devoted to criminal prosecution of patient abuse or neglect,” said Stern.

Medicaid fraud recoveries in 2016 neared $3 billion, according to Richmond. That represents a rebound from the low recoveries in 2015 reported by FierceHealthcare. Gaps in Medicaid fraud prevention caught the eye of lawmakers in late 2015, and late last year the OIG proposed a new rule expanding the authority MFCUs have to investigate and prosecute abuse.

“[MFCUs] need the legal authority to investigate and prosecute patient abuse or neglect in home- or community-based settings in addition to institutions,” said Richmond.

A change in the current rules to provide additional resources to MFCUs would require federal legislation. “There does seem to be interest for that to happen on Capitol Hill,” Stern said.